S&P rates Charter NEX CCR, facilities B

S&P said it revised the outlook on Charter NEX US Holdings Inc. to negative from stable and affirmed all of its ratings.

At the same time, the agency assigned a B corporate credit rating to Charter NEX US Inc.

The outlook is negative.

Additionally, S&P assigned a B issue-level rating and 3 recovery rating to the company's proposed first-lien credit facilities, which comprise a $75 million revolver due 2022 and a $585 million term loan due 2024. The 3 recovery rating indicates an expectation for meaningful (50%-70%; rounded estimate: 65%) recovery for lenders in the event of a payment default.

"We expect that CNEX will fund the roughly $1.5 billion transaction with its new $585 million first-lien term loan, new $245 million senior unsecured payment-in-kind (PIK) toggle notes, and the remainder of its $715 million in equity," S&P credit analyst Henry Fukuchi said in a news release.

The majority of this equity contribution will come from Leonard Green & Partners LP and the remaining will come from Oak Hill Capital Partners and management.

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